Russell 2000 Tests 200-Day MA; Nasdaq, S&P 500 Regain 50-Day MA: What Lies Ahead?


After () pushed down to the 200-day MA in its third test of the moving average since early August, there was an accumulation-worthy counter move higher that returned the index back to its 20-day MA.

The problem is that repeated tests of support (or resistance) eventually lead to breaks. Today’s gain looks good, but I would like to see a rally from here through the 50-day MA.

Otherwise, I suspect a fourth test of its 200-day MA will see a breakdown.

IWM Daily Chart

The had a solid, if somewhat low-key trading day. Over the past week, trading volume has skewed in favor of accumulation, with technicals returning net positive.

If you were a swing trader, there is the potential for a ‘buy’ trade with a stop running below the 20-day MA. Go in with low expectations, and you might be richly rewarded.

COMPQ Daily Chart

The is offering a similar opportunity as the Nasdaq with a return above its 50-day MA in a move that should go on to challenge the swing high at 4,541.

Technicals are net bullish, helped by a holding of the bullish mid-line of stochastics. A push above the August swing high would give impetus for the Nasdaq and to follow suit.

SPX Daily Chart

If there is a warning sign for bulls, it’s that the Nasdaq Summation Index has remained in a downward trend. I find this to be a reliable indicator of a bottom, but it needs to be on a ‘buy’ trigger, and it’s firmly on the ‘sell’ side of the fence.

NASI Daily Chart


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